If a Stock's Expected Return as Seen by the Marginal

question 5

True/False

If a stock's expected return as seen by the marginal investor exceeds this investor's required return, then the investor will buy the stock until its price has risen enough to bring the expected return down to equal the required return.

---

Definitions:

Preference

The favoring of one option over others, influenced by factors such as values, desires, and needs.

Autokinetic Effect

A phenomenon in which a stationary, small point of light in a dark room appears to move because of involuntary eye movements.

Normative Influence

The impact of societal norms and standards on an individual's behavior, often driving conformative actions.

Social Roles

Expected behaviors, duties, and rights associated with each social position, shaping how individuals in those roles are supposed to act.